Hollywood scam; Tax credits cost taxpayers

EDITORIALAugust 18. 2013 11:15PMIn Massachusetts, the unemployment rate has increased to 7.2 percent, substantially higher than New Hampshire’s 5.1 percent. But at least Bay Staters can take comfort in this: Their state is in the movies more than ours.

Massachusetts is one of the states that falls all over itself to extend “tax credits” to the film industry. Its politicians and star-struck hacks like to say that such credits will more than pay for themselves. Think, they say, of all the jobs that are created.

Two things are wrong with this thinking. First, the credits are often sold, at a premium, to companies other than the original film outfit. The state sees no benefit from such sales, and the credits may or may not be of the benefit to the taxpayers that the pols claim.

But more interesting is that the jobs supposedly created by the movies made in Massachusetts are costly. A recent study, according to a Boston Globe story, showed that each of these jobs costs the taxpayers more than $128,000, based on the lost tax revenue.

Noah Berger, president of the Massachusetts Budget and Policy Center, told the Globe that the tax break to film companies equals 25 percent of their payroll and production costs, as well as a sales tax exemption.

“Even if the movie does make any money, we don’t get back any of those profits,” Berger said. “The way the law works, you can make a movie and it can be great, terrible, popular, not popular . . . and we will simply pay 25 percent of the cost of making it.”

We hope that Granite State lawmakers and bureaucrats can keep that in mind the next time someone proposes providing financial help to Hollywood. The best help we can give them is the beautiful backdrops that New Hampshire offers, plus the genuine business-friendly atmosphere we have.